I was looking around today at various life insurance blogs to see what people were writing about.

Lindquist.com had this post regarding Life Insurance Settlements being regulated.

It seems that if people are selling their life insurance policies to cash out of them, these transactions are regulated by NASD rules and are teh same as secureties transactions.

I'm going to keep my ears perked up for more about this.

Member Obligations with Respect to the Sale of Existing Variable Life Insurance Policies to Third Parties
Executive Summary

Sales of existing life insurance policies to third parties?often referred to as "life settlements"?have grown exponentially in recent years, and that trend appears likely to continue. The purpose of this Notice is to remind firms and associated persons that life settlements involving variable insurance policies are securities transactions, and firms and associated persons involved in such transactions are subject to applicable NASD rules.

Suffering from a life threatening disease and want to settle your life insurance policy early?
Viatical settlements are also becoming more and more popular with seniors and people suffering from life threatening illnesses.

According to this site:

A viatical settlements is a large amount of cash given to terminally ill people, known as viators. This money is given in exchange for the death benefits of their life insurance. The word viatical or viator comes from a Latin origin, known as viaticum, which means provisions of a journey.

These sorts of settlements are often found attractive to viators (sellers) because of the fact that they will receive a large amount of money during their final days. Viatical settlements are especially attractive to investors for their high rates of return.

Dictionary.com defines viator as:
A person with terminal or a life-threatening illness who sells their life insurance policy at a steep discount to an insurance firm to pay for their health-care costs or improve their quality of life.

Investopedia Commentary
A viator will usually receive a percentage of the policy's face value, around 50-70%, in a cash payment. This is one way in which an individual is able to receive money to help with medical coverage.

If you're suffering from a life threatening illness, a viatical settlement may be the way to go. This may also be the case if you're the only member of your family and you don't have anybody who relies on you financially any more. It may be a good idea to cash out of your life insurance policy while you're still able to enjoy the money.

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Articles from December 2006
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